International Socioeconomics Laboratory
International Socioeconomics Laboratory

Economic Shifts In The Music Industry Reflect The Times We Live In


To a casual observer, the current music industry may seem saturated with certain artists or genres. But despite living through a pandemic that has resulted in record-high unemployment rates, the music industry has not reflected these challenges and upholds the previous mainstream structure of musical ideas. Why has the music industry failed to reflect larger shifts in time, especially during a huge period of economic inequality?/p>

Throughout the centuries, people of wealthier social circles have always had a disproportionate advantage when it comes to musical accessibility. Before technological inventions such as the phonograph and discs, the only way music was traditionally accessed was through live concerts and private viewings, all of which cost money. And although music had become more accessible in the 19th-century via the phonograph because you were able to listen to more professionally produced music at home, it was not available in the average person’s home. Parlor music, where only financially privileged people gathered to listen to live music, was still the norm. However, music was still more accessible then than in the century prior due to the emergence of discs and vinyl; other technologies such as the radio, MP3s, smartphone devices, and streaming services continued the trend of making music more accessible throughout the 20th century.

We are now in a place where music is a rather cheap and accessible commodity, as opposed to a luxury like in the 18th century. This is important as consumers have more direct input and control in what they can consume.

Music has always been an outlet for people to express their struggles, including various financial burdens or socioeconomic injustice. Yet, strangely enough, previous eras had more of a pronounced correlation between their music and the social issues occurring at the time. For example, Gospel music was frequently used during civil rights movements to help protestors convey the power behind their messages: The song “We Shall Overcome,” for example, was sung by protesters in strikes and marches, fermenting the fight for civil rights. Additionally, songs such as “Oh, Freedom” were used to portray the struggles of black laborers in the south, and “Poor Miner’s Farewell” during the great depression was used to account for the economic struggle of regular people. In all these eras, protest music was used to expand civil and economic rights.

But why was the trend not as pronounced during and after the Great Recession in 2007-2009 (the effects of which persisted in the years after)? The more popular songs during this era were “Numbers” by Flo Rida or “Bad Romance” by Lady Gaga, which were not related to the economic crash. This popularity may have been due to people looking for a distraction from the economic decline that had occurred.

So why the inconsistency? According to Economist Alan Kruger, this inconsistency occurred because it has become harder for the majority of musicians to keep up with the fast-paced music industry because of the industry’s “winner-takes-all” economic ideology, where monetary value is inflated and largely distributed to only one individual or company, like a monopoly. In Kruger’s 2013 White House speech, the share of concert revenue has more than doubled for the top 1% of musicians from 26% in 1981 to 56% in 2012. This has paralleled the overall US economy in which the top 1% of families have doubled their income from 1979-2011.

In addition, the United States’ GINI coefficient, a number that dictates the wealth inequality and wealth distribution in a country, in 2019 was 0.48, up from its 0.43 in 1990. This indicates that a “winner-takes-all” economy has largely been controlled via wealthier individuals who continue to perpetuate their financial gains. Not to mention, it is easier to replicate music with increased streaming and globalization; there are higher profit margins on songs since music for popular artists can be made cheaper, but it is also seeing popular musicians’ live as the prices of tickets via top artists continue to skyrocket. According to Kruger, the price of a live concert ticket for a top artist has soared by 400% from 1981-2012 compared to the consumer price inflation at 150% from 1981-2012.

Even during periods of huge economic inequality, the music industry has remained stagnant in documenting it and instead decides to oversaturate with similar artists or concepts. The modern history of the U.S shows us that access to music and the technology that offers it is often a way of dictating what remains popular.

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